In this article:
Do you sometimes forget to track your expenses, put off setting aside money for savings or miss debt payments? If you feel overwhelmed by keeping track of your finances, it may be time to work on streamlining your money management.
Streamlining your finances is simpler than it sounds—especially when you automate as much of it as possible. This allows you to set it and forget it with budgeting, saving and repaying debt while reducing your burden and helping prepare you for a more secure future.
To simplify your finances, consider automating your budget, bill payment, savings, investments and debt repayment. You can set up your steps and stick to them, then watch as the path to your financial goals unfolds.
1. Automate Your Budget
A payday routine, where you allocate exactly where your paycheck goes, is one of the best ways to create a budget and organize your money as soon as you receive it. First, assess what money you have coming in, what money needs to go out and where it all ends up.
For a proper budget, decide how much of your money goes toward each category:
- Essentials, such as housing, groceries, gas and child care
- Discretionary expenses, like that new pair of shoes or restaurant meal you really want but don't necessarily need
- Debt payments on credit cards, mortgages and loans
- Savings for your all-important emergency fund and short-term financial goals
- Investments for your retirement and wealth-building
To determine how you want to contribute to each category, you can use a spreadsheet or notepad and paper to begin tracking your expenses using one of many budgeting techniques—envelope budgeting, 50/30/20 or zero-based—or you could let an app handle it for you.
Budgeting apps can assess your spending and income, keeping you apprised of how you're spending your money. With many budgeting apps, you'll see exactly where your money goes and whether you're on track with your financial goals. Having an app track your spending and goals may make you more likely to stick to your budget.
You can try out a free budget app or a program that you can pay a monthly or annual subscription for, such as You Need a Budget (YNAB).
2. Automate Your Bills
Automatic payments are your friends. They keep you from stressing about what bill is due when and eliminate the risk of a late or missed payment—which can have serious negative effects on your credit score. Aim to automate everything from credit card bills to mortgage payments.
You can set up autopay through the bank account you use to pay bills or directly with your lender or service provider. Avoid scheduling minimum-only payments for bills you pay interest on, like your credit cards. Instead, use your autopay to commit yourself to paying above the minimum—and ideally the full balance—to save you money over time.
One important factor in automating bill payments is making sure you have enough money in your bank account when the payment is scheduled. Try scheduling your bill payment dates to fall just after your regular payday, and determine how much you can afford to pay each month. If you're worried about overdrawing your account, you can schedule the minimum payment but commit to paying more when possible during the month.
3. Automate Your Savings
Setting aside savings automatically is the best way to stay on track with your savings goals. Building up savings in an emergency fund is vital, but you can also auto-save to fund big purchases or future vacations. Even if you choose to swipe a credit card for the rewards perks, you'll already have the cash set aside to cover your spending.
To save automatically, put a portion of your income immediately out of reach. You can:
- Adjust your direct deposit to send a percentage or amount of each paycheck to your savings account. This should be as simple as providing the extra account information to your employer.
- Use a smart banking app that will contribute to your savings at regular, preset intervals. Online bank Chime offers a simple (and free) solution: The platform has a feature to automatically snag 10% of your paycheck and send it straight to your savings.
4. Automate Your Investments
If you don't already have a tax-advantaged individual retirement account (IRA) or an employer-sponsored retirement account such as a 401(k) or 403(b), this is your sign to get that started. Set it up so you contribute at least enough from your paycheck to reach your company's maximum matching amount (if it offers matching contributions), or ideally 15% of your pretax income. Once established, your contributions will be added automatically, growing your retirement nest egg with each paycheck.
5. Automate Your Debt Payoff
The debt avalanche and snowball methods are ways to strategize your debt payoff by making minimum payments to most of your accounts while you focus on paying off one debt account at a time. Automating minimum payments on these accounts and then manually pouring any extra funds you can afford into the account you're working to pay off soonest can be an excellent way to pay your debts more quickly.
You can establish a debt payoff plan like one of these yourself—or plug your information into a debt-savvy app and watch your balances dwindle before your eyes. Tally is one app that creates debt payoff strategies tailored to your unique debt situation. You can manage all your cards and payments within one app while you crush your credit card debt.
Pay Attention to Your Credit as You Streamline Finances
Simplifying your money management starts with getting a full picture of your financial situation, including your credit picture. You can get free credit monitoring with Experian to monitor your credit accounts in one place. Plus, you can get personalized credit recommendations based on your credit profile.
If improving your credit score is part of your overall financial plan, you can also activate Experian Boost®ø. This feature gives you credit for your monthly bills like phone, utility and streaming services and can help you improve your FICO® Score☉ powered by Experian in minutes.